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New Era in Labour Law Litigation

The Law on Labour Courts (the “Law”) was published in the Official Gazette on 25 October 2017 and its principle provisions took effect on 1 January 2018. The Law imposes, among others, the application of mandatory mediation process in labour law disputes prior to initiating court proceedings.

Mediation as a pre-requisite:

Employment relationships in Turkey frequently end with lawsuits targeting former employers resulting in excessive workload on labour courts. The Law was introduced in an attempt to decrease such workload and as such makes it obligatory for the parties to a labour dispute to first apply to mediation procedures (and not the labour courts) to resolve the dispute in hand. In other words, in case of a dispute, parties thereto will be required to initiate and exhaust mediation before commencing court proceedings; otherwise, the courts will reject the application based on lack of jurisdiction.

The principle reasoning for the introduction of mandatory mediation is reducing the amount of labour law disputes brought before labour courts as well as encouraging parties to choose mediation as their means of dispute settlement, the legislator being of the opinion that, mediation procedures offer a rather more time and cost efficient means to resolve the disputes in question.

Scope of mandatory mediation:

Pursuant to the Law, it will be mandatory to initiate mediation procedures before filing a lawsuit on grounds of compensation and other debt claims made either by the employer or by the employee. In this respect, all customary employment claims such as those related to severance and notice payment or the payment of amounts corresponding to unused annual leave, indemnification and re-employment claims will also fall in the scope of the Law and parties will need to first apply to mediation regarding these claims.

The only claims that do not fall into the scope of mandatory mediation are pecuniary and non-pecuniary damage claims arising from workplace accidents or occupational diseases. As such, court proceedings may be initiated for claims arising from workplace accidents or occupational diseases without prior application to mediation.

To the extent, a dispute is not finally settled by mediation to either party’s satisfaction, parties may seek remedy before a labour court. As a matter of procedure, such party will be required to submit the final minutes of mediation procedure to the labour court for a due trial.

If a lawsuit is initiated without a prior application to mediation, the court will dismiss the lawsuit on procedural grounds (i.e. lack of jurisdiction).

Mediation Procedure

The mediation shall be completed within three (3) weeks from the date parties’ initiation of the mediation process. Where necessary, the mediator can extend the mediation period by a further one (1) week period at most. In this regard, the dispute must be resolved within a maximum period of four (4) weeks, the latest.

If the parties are able to settle the current dispute by way of mediation duly, each party will be obligated to pay half the share of the mediation fees. If the parties fail to settle the said dispute by mediation, the first two (2) hours of the mediation fee will be covered by the Turkish Treasury and the remaining costs shall be covered equally by the parties.

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